$873 MILLION MID-YEAR IMPROVEMENT: FUNDS FOR COMMITMENTS, PRIORITIES

Saskatchewan's 2005-06 Mid-Year Report reveals an $873 million fiscal improvement, mainly due to high oil and gas prices.

"Our fiscal success allows us to address immediate needs and priority program commitments for the people of Saskatchewan," Finance Minister Harry Van Mulligen said.

The improvement comes from an $843 million increase in own-source revenues over Budget (including a $624.2 million increase in oil and gas revenue) as well as $30 million in reduced interest costs. The government is now forecasting a $135.1 million surplus in the General Revenue Fund and a $207.1 million surplus on a Summary Financial Statement basis.

"This is another great day for Saskatchewan," Van Mulligen said. "Half-way through the year we're showing a surplus and we've once again reduced our debt levels. Our strong bottom line has let us invest in people's priorities through protection from high natural gas rates, and dedicate funds toward education capital, debt reduction and other priority social and economic programs.

"The majority, about 86 per cent of the in-year improvement is being allocated to one-time or non-recurring items like the academic health sciences centre," Van Mulligen added.

Addressing Immediate Needs

•$139.5 million – providing energy cost relief over the next two years for Saskatchewan people through the Saskatchewan Energy Share program

•$14.7 million – disaster assistance

•$84.2 million – CAIS top-up for 2005 crop year (First Quarter CAIS top-up for 2004 crop year was $75 million, bringing total additional CAIS funding to $159.2 million)

Advancing Strategic Plans for the Future by Acting on Commitments

Action Plan for the Economy actions:

•$59.0 million – Northern roads

•$0.6 million – First Nations and Métis Economic Development Grants

•$0.4 million – Aboriginal Employment Development Program

•$0.7 million – Enhanced immigration efforts

Action Plan for Saskatchewan Health Care actions:

•$108.1 million – Additional funding for Regional Health Authorities

•$100 million – Academic Health Sciences Centre

Other strategic actions:

•$0.9 million – For fulfilling police promise of 200 additional officers hired since 1999, plus missing persons task force and crime suppression strategy

•$2.9 million – Funding for the Project Hope action plan for substance abuse

•$1.8 million – Funding salary increases for staff at Community Based Organizations (CBO) and the Saskatchewan Association of Rehabilitation Centres, as part of the 2001 policy framework for allocating additional compensation resources to CBOs

•$7.3 million – Provincial meat processing strategy

Continued Sound Financial Management

•$76.1 million – Permanent debt reduction, demonstrating fiscal prudence for future generations

•GRF balanced without a transfer from the Fiscal Stabilization Fund

"Our government has a plan for Saskatchewan that improves the quality of life for us all, not only now, but into the future," Van Mulligen said. "We have the dollars available to put towards important initiatives, and our government will see these commitments through."

The Mid-Year improvement includes the $255 million First Quarter improvement announced in July, where $75 million was injected into CAIS top-up, as well as funds allocated for a provincial meat processing strategy to counteract impacts of the BSE crisis, health pressures, disaster relief, the province's forest fire fighting fleet and other areas.

The province's fiscal year oil forecast, which was estimated at $38.50 U.S. per barrel at Budget, was revised upward to $49.43 U.S. per barrel in July when the province released its First Quarter Report. The forecast at Mid-Year has again been revised upward, to $60.09 U.S. per barrel.

"It's important to share the province's good fortune with the people of Saskatchewan. We've done that – by addressing immediate needs, by advancing strategic actions and by continuing on a path of sound financial management," Van Mulligen said. "We've struck a fiscally responsible balance between new spending and debt management, and are confident Saskatchewan people will benefit from these measures."

"There's more good news ahead – our economy is strong, and all indicators are positive for next year," Van Mulligen added. "I also look forward to receiving the report of the Business Tax Review Committee on November 24th, to see where our government can make even further improvements to grow our economy and create jobs for our youth."

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For More Information, Contact:

Lorri Thacyk Finance Regina Phone: (306) 787-6605 Cell: (306) 537-0943